This article will be circulated in Vital Signs Mag no.4, of which we distribute 1,000 copies within our two local hospitals. Feel free to help us with the print cost.
Watching the news, it’s easy to believe that the world is going crazy and that figures like Trump or Putin are the reason for it. In this article we’ll try to throw some thoughts out there: Rather than being the reason for it, Trump’s trade war is the result of the crisis of an absurd social system. We have heard conversations about this going on all the time in break rooms, the canteen and on shift. We think it’s important to throw out some ideas that might help make more sense of the situation.
Global markets and nation states
One of the problems of this system is that there is a large global market and relatively smaller nation states. There is a mismatch between a global ‘economic’ system and smaller ‘political’ entities. The role of the state is to create the most profitable conditions for corporations on its territory and for local corporations to make profits abroad. That applies, with different features, for the big powerful states, and for states lower down the ruling class’s hierarchies.
The global market is characterised by economic ups and downs that tend to be chaotic. Nation states are therefore trying to enforce international regulations to ensure smooth market transactions, but at the same time they compete with each other and are therefore constantly trying to skew these regulations in their own favour. The nation state that manages to exploit the working class in its territory the most profitably and commands the biggest industries tends to act as a ‘general regulator’ on a world scale, with its currency acting as a world currency and its army as a global police force.
Up to WWI Britain played that dominant role, from WWII onwards it was played by the US. During the 21st century China has emerged as a challenger to the US, at least in economic terms. The global system produces and requires leading state forces, as it needs to open markets for investments, guarantee the free flow of commodities and access to cheaper labour – at the same time the leading nation states also acts in their own interest, which becomes particularly apparent during times of crisis. When the crisis does hit, the competition amongst nation states intensifies and the struggle over shrinking market shares, resources and profitable conditions turns violent. Instead of opening markets, the local markets are shut off for competitors. Trade wars, such as we see now with Trump putting up tariffs, are often followed by armed disputes.
The role of the USA
After World War II the USA became the biggest creditor worldwide, through maneuvers such as the Marshall Plan. The French and British colonial system were seen as a hindrance to free global trade and the USA supported an end to colonial rule. At the same time it supported dictatorial regimes in order to open local markets for US investments, such as the Shah regime in Iran or various authoritarian regimes in Asia and Latin America. At home, the local working class was attacked through anti-strike repression, racist policing and the expansion of a brutal factory regime, such as the assembly lines at Ford and other major corporations.
By the 1960s and 1970s, workers in the US and Europe were able to express their own strength in and around these large scale factories- the social power of the working class reached a peak moment and tipped the system into an economic and political crisis in the period of struggle between 1967 and 1978. In this situation the USA used its role as a leading global state to attack working class power: the crisis of 1973 was used to increase interest rates drastically, which led to a massive hike in unemployment in order to bring wages down and undermine the collective strength that had been built by workers in large industries.
Authoritarian regimes were backed up in order to facilitate a shift of factories from the US and Europe to countries such as South Korea, Taiwan and China. Despite the relocation to countries with cheaper labour and a massive decline in workers’ wages in the US, profits in the North did not recover. This was compensated by a massive increase in credit (debt) and speculation at the stock market – by the 1980s the big US car manufacturers, which were still the biggest global corporations at the time, made more money by investing their pension funds at the stock market, than by making cars. Shrinking wages were compensated by an increase in personal debt and cheaper goods from countries like China. The USA turned from the world’s biggest creditor into the world’s biggest debtor.
Instead of dominating the world market through its industrial manufacturing power, the USA had to rely more and more on its power as a military force that could defend the leading role of the US Dollar. This phase saw a brutal increase in poverty and competition amongst workers. In the USA and Europe, there was a downward spiral of wages, while ‘neoliberal’ politicians like Clinton or Blair preached that people should be open to “globalisation”. This became one of the reasons why from then on many workers turned towards nationalist parties to seek support, or at least to express their anger.
The crash in 2008 and the begin of the trade war
The crash in 2008 showed that the house of credit cards and the global role of the Dollar was shaky. It became clear that the global markets would not recover any time soon and that in the long-run the competition with the Chinese state, who by now was the biggest creditor to the USA, would be lost. During the 1990s and 2000s China had turned from a manufacturer of cheap consumer goods to a major producer of high-tech, such as electric vehicles, large scale infrastructure programs and modern software. Under President Obama the USA started to attack China, telling people that ‘democracy’ was at stake – while supporting all sorts of anti-democratic movements and regimes in its own sphere of interest. The militarisation of the Pacific started, while US influence also tried to weaken the link between Europe and Russia as a competing economic bloc – contributing to the dynamic that led to the war in Ukraine. In this situation, Brexit and the vote for Trump expressed two things.
Firstly, the fact that in a large-scale global crisis, all nation states are forced to ‘make their neighbours pay’. Although it hurts their general economic development, individual states put up tariffs or devalue their currency. Secondly, that the local working class had enough of liberal politicians who blame them for the failure of neoliberal policies – but instead of taking on the state and bosses, parts of the local class hooked up with middle-class conmen who blamed migrants and minorities for the situation.
Trump and other ‘right-wing’ politicians can present themselves as ‘anti-establishment’, even when they are just a different faction of the same elite class. They try to blame migrants or other marginal groups for the worsening of conditions and thereby divide the local working class – but once in power they find themselves in trouble. Trump has to show that he is doing something, but actually he has little scope to increase profitability or create well-paying jobs at home. Putting up the tariffs for imported goods is a rather helpless show of force – as ‘making people pay for Chinese electronic goods’ itself doesn’t create profitable conditions for investments at home. These conditions can only be created through more direct intervention on two fronts. Firstly, an actual attack and taking over of resources, such as rare earth mineral mining operations in Africa that have been captured by Chinese corporations, or electronic factories in Taiwan. Secondly, a massive attack on wages of workers in the USA, in order to create profitable conditions at home. The current militarisation that we are seeing across the world is a process which incorporates both approaches..
The current moment
We find ourselves in a dangerous situation. With global markets in a downward spiral, and rising discontent at home, most states are preparing for trade wars and militarisation – we explore this process of militarisation more in another article in this issue of Vital Signs.In most countries, the working class lacks confidence. A massive part of this is that workers have been unable to defend themselves against massive attacks on their lives, jobs and dignity. In France, for instance, massive public sector strikes were unable to completely defeat the pension reforms pushed through by Macron’s neoliberal government. In Germany, massive automotive job cuts have been imposed in the name of “green” growth without much resistance and in the US many workers had to accept a two-tier wage system, where new starters would earn only half the wage of the older workforce.
Currently many workers don’t believe that they have the strength to defend themselves against the attacks on their conditions by the state and employers. Workers who feel weak are more likely to link up “their own” states and their effort to conquer market shares abroad. Even if they disguise the latter as some sort of struggle for “democratic” or “western” values, the recipe and results are still the same. Just like in 1914, or in 1939, we run the danger that workers will be dragged into another global massacre to solve the crisis of a system that exploits us.
The current crisis shows us the absurdity of this system. People go hungry or homeless or sick, not because there aren’t enough resources (knowledge, labour, technology) to produce what they need, but because production of such goods doesn’t promise any profits. The crisis of profits and markets exceeds the power of any national government. All that is left for them is to intensify national competition. A lot of it is at the same time a spectacle to try to convince their citizens that they are doing anything at all, when in reality they have little control over the situation. This sets off a dynamic where states tumble into the direction of global conflict.
While workers cooperate globally in order to produce mobile phones or cars or hip implants, nation states now mobilise them against each other. They are forced to cut health services or disability benefits in order to funnel money into re-armament. It is up to us, a global coordination of workers, to take back control. We argue for a global working class movement against militarisation and for a classless society. It’s socialism or barbarism.
